Topics: What's New from the Charities Directorate of CRA, Canadian Charity Law, Receipting by Canadian Registered Charities
The CRA has laid charges against a promoter of an art donation scheme in which there was a donation of overvalued artwork to the Municipality of Larouche. Municipalities are qualified donees entitled to issue official donation receipts just like registered charities. It will be interesting to see if some of the promoters of similar schemes involving charities are also charged?
Here is the CRA press release:
Canada Revenue Agency News Release
Art-donation scheme in Larouche: Charges laid against Claude Simard
Montréal, Quebec, July 14, 2010… Charges were laid yesterday at the Montréal Court House against Claude Simard, the promoter of a scheme involving the donation of artwork to the municipality of Larouche in the Saguenay region.
An investigation conducted by the Canada Revenue Agency (CRA) revealed that Mr. Simard willfully evaded the payment of taxes due from third parties by helping them to obtain ineligible tax deductions, for the taxation years 2001 to 2007, for the donation of overvalued artwork to the Municipality of Larouche.
Donating art and other gifts in kind to registered charities or other specified institutions is a legitimate charitable activity that is encouraged by the Canadian tax system. However, taxpayers should be aware of the risks associated with certain art-donation schemes—often referred to as “art flipping”—which have the effect of cheating the government out of taxes that should be paid.
The CRA also wants to warn taxpayers about investing in schemes that provide inflated or unsubstantiated tax losses or deductions. For more information in this regard, visit our Web site at http://www.cra.gc.ca/alert.
The information in this news release was obtained from the Court records.
Additional information on convictions can be found on the Media page of the CRA Web site at http://www.cra.gc.ca/convictions.
For media information:
Telephone: 514-283-2464, ext. 8288
Toll-free: 1-800-292-3430, ext. 8288
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.